May 11, 2006

Microsoft Sides with Nintendo in Fight vs Sony

by ssavage

LOS ANGELES -- Microsoft Corp. sided with rival Nintendo Co. Ltd. on Wednesday in the fight to unseat video game leader Sony Corp., saying many consumers will choose to buy both of their machines for the price of one PlayStation 3.

The bad blood between Sony and Microsoft in the fight for dominance in the nearly $30 billion video game industry has escalated over the last few days, with both sides trading barbs at the E3 Expo, the video game industry's annual trade show.

Microsoft entered the next-generation game console market first with its Xbox 360 last November.

Sony aims to extend its market leadership with its upcoming PS3, while Nintendo plans to offer a new game machine called Wii in the fourth quarter.

"Tell me why you would buy a $600 PS3?" Peter Moore, a Microsoft vice president, said in an interview. "People are going to buy two (machines.) They're going to buy an Xbox and they're going to buy a Wii ... for the price of one PS3."

Microsoft predicted on Tuesday it will have 10 million Xbox 360 consoles in the market before Sony launches the PS3. The high-end Xbox 360 sells for $399, but it does not include a built-in high-definition DVD video player that comes with Sony's PS3.

Sony plans to sell a premium PS3 model for $599 when it debuts in North America on November 17, and Nintendo has not yet disclosed pricing for Wii.

Wii comes equipped with motion sensitive controllers to allow users to mimic the motion of wielding a sword or swinging a tennis racket.

Moore then turned pitchman for Nintendo's Wii, the latest offering from the Japanese company that once dominated the video game industry.

"People will always gravitate toward a competitively priced product -- like what I believe Wii will be -- with innovative new designs and great intellectual property like Mario, Zelda and Metroid," Moore told Reuters.

Sony currently dominates the worldwide video game market with a 66 percent share, while Microsoft and Nintendo each hold 17 percent, according to Strategy Analytics.

"We have 100 percent market share of the next-generation, and their job is to take that from us," said Moore.

"When I think on everything that we've got going right now that is real versus what Sony promises to do six, seven months from now, obviously we feel very good about where we stand."

LOST IN TRANSLATION

Despite Microsoft's head start with the Xbox 360, the software giant still faces an uphill climb in Sony and Nintendo's home turf.

Microsoft received a tepid response to its Xbox 360 debut in Japan and demand fell short of expectations during last year's holiday season when it sold about 100,000 machines.

The company introduced a competitively priced console in Japan, but some of its game titles did not appeal to Japanese gamers. Moore expects upcoming role-playing games like "Lost Odyssey" and "Blue Dragon" from the creator of the popular "Final Fantasy" series to do well in Japan.

"Quite frankly," said Moore, "if we're sitting here a year from now and things continue to fall flat, then we might say 'we don't know what to do anymore."'